If the FTC lets Google off with voluntary undertakings Europe should take a different view.

December 18, 2012 by ICOMP Secretariat

Rumours have been circulating this week that Google may ‘voluntarily’ make some changes to the way it conducts its search business and thereby avoid any action or indeed even censure from the FTC. Whilst the actual decision of the FTC is still unknown, what is clear is that the situation in Europe is very different.

This news comes as a grave disappointment to the scores of companies that had put their faith in the FTC to protect them from the full brunt of Google’s monopoly power. Howeverit is clear is that the situation in Europe is very different.

Not only is Google’s dominance even higher in the EU countries – in excess of 93% in some – giving it extraordinary market power which simply cannot be ignored, but the case in Europe is not simply Google vs. the European Commission. There are 19 other parties – all complainants that have raised specific, well documented and serious complaints against Google’s abuse of its dominant position. Each of these complaints has rights and each will need to be satisfied that any settlement addresses the issues at the heart of their complaints. As ICOMP member Dan Savage, CEO of Tradecomet.com said, “should the FTC not act it will hand Google a free hand as it continues to increase its dominance of worldwide web.Comparison shopping sites are already on the endangered species list as Google’s own service, Google Shopping, receives increasing prominence on the top half of the first page of search results. This kind of concentration of power has serious consequences in the long run”.

It is therefore very unlikely that Google will escape in Europe with a weak voluntary undertaking to make some changes to elements of its search business.

The FTC and the EC operate under very different legislative frameworks and are dealing with substantially different market realities. The European Commission has an excellent record of winning its cases and bringing effective remedies against abusive dominant players. There is plenty of evidence that demonstrates the harm that Google´s behaviour is causing in the EU and so every chance that a robust set of solutions will be imposed on Google.

However, Google’s track record of obfuscation and avoidance of responsibility make any ‘voluntary’ actions extremely hard to take seriously. As documented in a Senate hearing in September 2011, Google has knowingly disregarded business agreements, making use of its search monopoly to force competitors to fall into line as well as claiming competitor content to be its own. Merely requiring Google to “label” manipulated search results, will do nothing to help consumers or promote competition nor will it truly address the underlying issues at hand. Indeed, if Google will not abide to the terms of a contract then how can regulators trust that the company will abide to voluntary agreements? Furthermore, labelling and other “cosmetic” actions will not address the harm already done to entrepreneurs around the world and equally will not restrict Google from continuing to act belligerently in the future.

We know from its wilful ignoring of the FTC’s Consent Decree on Google Buzz , the many layers of confusion and avoidance connected to the investigations of the SteetView WiFi snooping scandal, the iPhone hacking scandal and the way it implemented its privacy policy in the teeth of criticism from European consumer affairs organisations, that Google simply can’t be trusted to keep to even weak settlements without stringent means of enforcement.

The FTC´s decision should not, therefore, preclude the European Commission from responding robustly to the overwhelming number of complaints and concerns which have been raised against Google over the last two years in Europe. Thousands of European businesses and jobs depend on it.